This Commons briefing paper summarises the Insolvency Service’s “Review of the monitoring and regulation of insolvency practitioners” published in September 2018. In this document, the Insolvency Service detailed significant concerns about the practices and regulation of Insolvency Practitioners working for volume providers of IVAs and made several recommendations.Jump to full report >>
An IVA is a statutory debt management procedure. It is a legally binding agreement under which an individual, with the agreement of their creditors, repays part of what they owe to their creditors, generally over a period of five years. An IVA must be supervised by an authorised Insolvency Practitioner.
Individual Insolvency practitioners must be a member of a “Recognised Professional Body” (RPB) which also acts as their regulatory body. RPBs are responsible for ensuring that the quality of advice given by an Insolvency Practitioner is of an acceptable standard.
The Small Business, Enterprise and Employment Act 2015 introduced new statutory regulatory principles and objectives with which the RPBs must comply. The Secretary of State also has the power to create a single regulator of Insolvency Practitioners. This power will expire (if not used) on 30 September 2022.
Between November 2016 and November 2017, the Insolvency Service visited each RPB to assess how they carry out their monitoring and regulatory functions. It also undertook a themed review on how Insolvency Practitioners working at volume IVA providers are monitored and regulated.
In recent years, there have been two major developments in the use of IVAs:
The corporate structure of some IVA providers means that the Insolvency Practitioner is often an employee, supervising many IVA cases. This represents a different way of working compared to traditional insolvency practice.
On 26 September 2018, the Insolvency Service published a “Review of the monitoring and regulation of insolvency practitioners”. In this document, the Insolvency Service detailed significant concerns about the practices and regulation of Insolvency Practitioners working for volume providers of IVAs and made several recommendations.
This Commons briefing paper summarises the Insolvency Service’s findings to date and its recommendations. In the process, it also provides an outline of the main characteristics of IVAs as a statutory debt management procedure.
There is a separate Library briefing paper on “Individual Voluntary Arrangements (IVAs)” (CBP 5165), which provides more detailed information on IVAs. It looks at who is eligible to start an IVA; the IVA process; and the advantages and disadvantages of an IVA.
Both Library papers apply only to England, Wales and Northern Ireland. Scotland has its own law on personal insolvency, including the option of a Protected Trust Deed (instead of an IVA).
Commons Briefing papers CBP-8613
Author: Lorraine Conway